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Goldman Sachs-backed modular firm partners with France’s largest house builder
TopHat, a company that builds factory-made modular houses, has completed a deal with France’s largest house builder as it seeks to expand into Europe.
The Goldman Sachs-backed firm said it had made an exclusive partnership with Nexity on Wednesday 14 June to “accelerate the development of offsite construction in France”.
TopHat will contribute its modular expertise to the partnership, it said, while Nexity will provide its experience with French construction and development programmes.
Nexity developed 18,000 homes last year, similar to the output of the UK’s largest house builder Barratt. The developer aims to have 10% of its houses built in factories by 2028, citing the reduced delivery times, higher environmental standards and energy efficiency of modular production.
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The announcement comes as TopHat’s UK modular competitor Ilke Homes was fighting to secure its future. Ilke revealed last week it had paused factory operations and put itself up for sale. The company blamed issues with the planning system for its financial woes.
Unlike Ilke, which uses a land-led delivery model – in which the company buys land, secures planning permission and develops the site – TopHat only sells houses to third parties. About a third of its output is bought by housing associations, another third by developers, and the final third by build-to-rent providers.
Last month, Legal & General announced that it would stop production at its giant modular factory due to weak demand, leaving Ilke as TopHat’s last remaining major competitor in the UK modular sector.
TopHat is currently not profitable, but its losses have reduced in recent years and the firm has given itself two-and-a-half years to change that as it scales up production.
In April, TopHat said it had raised £70m from its latest fundraising round, with large house builder Persimmon and institutional investor Aviva investing and Goldman Sachs buying in once again.
It currently manufactures up to 800 homes a year from its 125,000 square foot facility in Derby. Work is scheduled to complete later this year on a 650,000 square foot factory in Corby, Northamptonshire, with the site to reach full production in mid-2024.
Veronique Bedague, chief executive of Nexity, said: “Our partnership with a leading industrial player in Europe, combined with our experience in low-carbon offsite construction, allows us to confidently envision the acceleration of this new industrial sector in France and actively contribute to the ecological transition.”
Jordan Rosenhaus, chief executive and founder of TopHat, said: “We will benefit from Nexity’s tremendous local market experience, which will combine with TopHat’s best in class platform to speed up the delivery of affordable, high-quality, energy-efficient homes.”
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